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230,000 workers in Danish industry get pay rise in bargaining agreement

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Ritzau/The Local - [email protected]
230,000 workers in Danish industry get pay rise in bargaining agreement
Trade union and employer organisations precent a collective bargaining agreement providing wage increases as a response to high consumer prices. Photo: Emil Helms/Ritzau Scanpix

A new collective bargaining agreement between an employers’ association and trade union will push wages up by four percent over the next two years.

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The agreement between the Confederation of Danish Industry (DI) and trade union confederation CO-industri, announced on Sunday, provides new working terms for up to 230,000 workers and 6,000 businesses in the industrial sector.

Trade union members will see their pay increase by at least 4 percent over the next two years under the deal.

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The agreement is important because it can set a precedent for upcoming bargaining agreements for private sector workers in other areas of the labour market.

The wage increase is primarily in response to inflation, both sides of the agreement acknowledged.

“These are large numbers we are talking about. We have agreed with each other on this because we believe it is the right way to go,” senior DI negotiator Lars Sandahl Sørensen said.

Union members and employers are given the option to vote for or against the bargaining agreement, as is the custom under the Danish labour model.

Danish trade unions negotiate with employers’ organisations every few years to develop collective bargaining agreements (overenskomster in Danish) regulating many aspects of Denmark’s labour market, from wages to pensions and paid parental leave. 

The new agreement will run for two years and expire in March 2025.

READ ALSO: EXPLAINED: What is a Danish collective bargaining agreement?

The wage increase set out in Sunday’s agreement could put businesses under strain, according to a senior economist from Danske Bank.

“There are many companies who are having big problems at the moment. The have been hit by high costs and must compete with companies in other countries where wages are maybe not increasing as much,” Las Olsen of Danske Bank told Ritzau.

Production industries are particularly affected by high energy and material prices and could be vulnerable, Olsen said.

The cost of energy and materials today is lower than it was during the height of the period with rising inflation, he also noted.

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But high prices have left their mark and ongoing supply problems are still an issue for businesses, he said.

“On the other hand there are other companies who are earning well at the moment and can better afford high wage rises. So it’s a bit of a mixed picture and it’s difficult to make collective bargaining agreements that suit everyone,” he said.

READ ALSO: What salary can you expect to earn in Denmark?

More collective bargaining agreements, affecting other sectors, are scheduled to be negotiated during the spring. Inflation and the government’s plan to scrap the Great Prayer Day holiday have both been cited as factors presenting challenges in this year’s round of negotiations.

The new collective agreement between DI and CO-industri does not include any compensation for the potential loss of Great Prayer Day as a paid holiday.

“I don’t know whether it’s the right place to direct our anger, against employers. Because the political system has made some blatant attacks on individual wage earners’ ability to take time off with their family,” said chairperson Claus Jensen of Dansk Metal, one of the unions represented in CO-industri.

“Anger must be directed at the politicians who have done this and we must deal with it when we get to voting booths,” he added.

“It would have been a mistake if we’d begun using all our energy on Great Prayer Day, which we fundamentally can’t do anything about. But we can ensure that our members can buy as much food as they could last year,” he also said.

READ ALSO: Danish trade unions demand referendum over Great Prayer Day abolition

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